Scandinavians: a bunch of cuddly free riders

May 30, 2013

The New York Times presents us today with some friendly coverage of a recent paper written by Daron Acemoglu, economist at MIT, James Robinson of the Harvard Department of Government, and Thierry Vierdier, economist at the Paris School of Economics. The paper, “Can’t we all be Scandinavians?”, is one of the more outlandish propaganda pieces I’ve seen of late, and the fact that such nonsense can be produced in such prestigious universities and further broadcast to the wider world via the “paper of record”, is just one more reminder of the great institutional power of neoliberal capitalism.

The essential argument is that global technological progress requires at least one country, currently the United States, have a “cutthroat” socio-economic system of very lucrative rewards for entrepreneurs coupled with high poverty, inequality, and few social benefits for the average worker.

Without pointing to any developed theory of human motivation or the actual history of inventions and discoveries, the authors grandly assert that technological innovations require a “cutthroat reward structure with high-powered incentives for success” which “implies greater inequality and greater poverty (and a weaker safety net)”. In short, progress can only be achieved through greed.

It’s the “cutthroat American society that makes possible the more cuddly Scandinavian societies”. The richer developed world is living off of the “technology frontier” enabled and advanced through the cutthroat reward system of the Americans. Those with more equal societies are parasites who “free-ride on this frontier economy and choose a more egalitarian, cuddly, reward structure”.

We can’t all be Scandinavians they conclude because the world’s growth rate would decline without at least one country structured around cutthroat incentives. “(O)ne may claim (with all the usual caveats of course) that the more harmonious and egalitarian Scandinavian societies are made possible because they are able to benefit from and free ride on the knowledge externalities created by the cutthroat American equilibrium.”

Progress and prosperity require poverty and inequality. This has been the elite religion since the very beginnings of human civilization; there’s absolutely nothing original here. What’s a bit more recent though, is the couple hundred year history of trying to couple the defense of aristocracy with the allure and prestige of science. The authors, with the weighty institutional credentials of MIT, Harvard, and the Paris School of Economics, and with an absurd use of advanced mathematics, outlandishly expect the public to accept their piece of silly, simplistic propaganda as a hard scientific theory. In a just world, they’d receive a prompt cutthroat firing for writing such trash.

I tried reading the paper, but was so wanting to yell before I got to the guts I just stopped. It wasn’t just because I disagreed, but just because their basic assumptions seemed unfounded and unsupportable with any math, model or current science.